BIR Ruling No. 005-2016

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

RA7279

BIR Ruling No. 063-14

#005-2016 1-6-2016

BILREY CONSTRUCTION/ EDDMARI CONSTRUCTION AND TRADING/

C.S. GARCIA CONSTRUCTION-JOINT VENTURE

23 Pelayo St., BF Homes Quezon city

Attention : CRISANTO S. GARCIA

Owner/ Manager

Gentlemen: C.S. Garcia Construction

This refers to your letter dated October 29, 2015 requesting issuance of Certificate of Tax Exemption for the socialized housing project under the Yolanda Housing Project located at Brgy. New Kawayan, Sta. Elena, Tacloban City pursuant

to Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992"

Transfer Certificates of Title (TCT) located at Brgy. New Kawayan, Sta. Elena, Tacloban City, to wit: Documents submitted show that the National Housing Authority (NHA) (TIN: , is the registered owner of parcels of land covered by two (2)

TCT Lot 1-B 58 16-A Total Area Area (sq. m.) 46,473 25,072 71,545

all issued by the Registry of Deeds for Leyte Province.

development into a residential project under the Yolanda Permanent Housing Program intended for the families affected by Typhoon Yolanda and qualified for housing assistance under R.A. No.7279. The NHA has issued Notice of Award dated Garcia Construction-Joint Venture for the Procurement of Fully Developed Lots and March 31, 2015 to Bilrey Construction/Eddmari Construction and Trading/C.S The above described properties have been identified and certified for

037977 Reiwe fy:

Jane+T Vutny C* YK

1-18-

-210

Bilrey Construction/ Eddmari Construction and Trading/C.S. Garcia Construction-Joint Venture Page 2 of 3 16-2016

Completed Housing Units under the NHA's Yolanda Housing Program located at Brgy. New Kawayan, Sta. Elena, Tacloban City-1,000 Housing Units with a contract

price of Pesos

To give effect to the Notice of Award, Contract for the Procurement of House

and Lot Packages at New Hope Village located at Brgy. New Kawayan, Sta. Elena,

Tacloban City was executed on May 7, 2015 between NHA and Bilrey Construction/

Eddmari Construction and Trading/C.S. Garcia Construction-Joint Venture, whereby

the latter is committed to deliver One Thousand (1,000) units (House and Lot

Package) for a price of F , and that according to the contract, the scope

of work under this project are "survey works, earthworks, road works, drainage

works, water system, electrical power lines, miscellaneous works and housing

construction.

In reply, please be informed that pursuant to Section 20 of Republic Act (RA)

No. 7279, pertinent portions of which state that:

"Sec. 20. Incentives for Private Sector Participating in Socialized

Housing. - To encourage greater private sector participation in

socialized housing and further reduce the cost of housing units for the

benefit of the underprivileged and homeless, the following incentives

shall be extended to the private sector:

XXX XXX XXX

"(d) Exemption from the payment of the following.

3) ( ( Project-related income taxes; Capital Gains Tax on raw lands used for the project. Value-added tax for the project contractor concerned; :

XXX XXX XXX

Considering that Bilrey Construction/Eddmari Construction and Trading/C.S

by NHA to undertake construction of 1,000 Housing Units with its necessary Garcia Construction-Joint Venture is a project contractor whose services are engaged construction components in New Hope Village located at Brgy. New Kawayan, Sta. Elena, Tacloban City and which was certified by the NHA as a socialized housing project as resettlement site pursuant to R.A. 7279, the income directly realized by

Bilrey Construction/Eddmari Construction and Trading/C.S. Garcia Construction- Joint Venture from the land development and housing construction with its necessary

Brgy. New Kawayan, Sta. Elena, Tacloban City shall be exempt from project-related construction components for 1,000 Housing Units in New Hope Village located at income taxes.(BIR Ruling No.063-14 dated February 19,2014)

New Hope Village located at Brgy. New Kawayan, Sta. Elena, Tacloban City by Bilrey Construction/Eddmari Construction and Trading/C.S. Garcia Construction- Joint Venture shall be exempt from VAT. However, the purchases of goods/articles construction with its necessary construction components for 1,000 Housing Units in Moreover, pursuant to Section 20 (d(3) of R.A. No. 7279, the housing

037977

Bilrey Construction/ Eddmari Construction and Trading/C.S. Garcia Construction-Joint Venture Page 3 of 3 #005-2016 16-2016

by Bilrey Construction/ Eddmari Construction and Trading/C.S. Garcia Construction- Joint Venture shall be subject to VAT, even if the said purchases are to be used for the

Socialized housing project, since VAT is an indirect tax which can be passed on by the Seller of the goods/services. It shall be understood that Bilrey Construction/ Eddmari

Construction and Trading/C.S. Garcia Construction-Joint Venture must issue non-

VAT official receipts on its gross receipts from the said socialized housing project.

This ruling is being issued on the basis of the foregoing facts as represented.

However, if upon investigation, it will be disclosed that the facts are different, then

this ruling shall be considered null and void.

Very truly yours

KIM S. JACINTO-HENARES

Commissioner of Internal Revenue

K-1-JRC 037977 JAN 0 4 2016